More than half of property purchases in the third quarter of the year were made by either mortgaged investors or first home buyers (FHBs), with existing owner-occupiers still pretty quiet. In fact, the share going to FHBs of 25% was their highest figure on record, surpassing the previous peak of 24% in 2006-07 – KiwiSaver withdrawals remain one important factor in their ability to stay active in the market.

With September's figures now available, the CoreLogic Buyer Classification series* for Q3 is complete and it confirms that mortgaged investors (multiple property owner/MPO) and first home buyers have increased their market share, while movers (i.e. relocating owner-occupiers) remain relatively quiet – in some cases because the shortage of listings means they can't find the next property to move to.

As the first chart shows, mortgaged investors had a 26% share of purchases in the third quarter, the highest figure since 28% in Q3 2016 (just prior to the introduction of the 40% deposit requirement by the Reserve Bank). In addition, the rise in market share for mortgaged investors isn't just because they've 'held on' while other buyer groups have made fewer purchases – in fact, the number of deals done by mortgaged investors in the third quarter was more than 20% higher than a year ago. Their activity levels were already rising pre-COVID, but this trend has just been reinforced in the past six months by reduced interest rates and the temporary removal of the LVR rules.

Source: CoreLogic Media